The Central Bank last week said that it has so far received Rs.3.2 billion after taking over funds in dormant accounts in banks.

Deputy Governor, P. Samarasiri, addressing a press briefing on Thursday (31) stated that the amount has been used to invest on securities.

Samarasiri made this observation following a media report that the Treasury would be taking over funds deposited in bank accounts that have been dormant for a year.

Central Bank Governor, Arjuna Mahendran, who chaired the press briefing at the outset pointed out that the report was erroneous. According to standard procedure, the Central Bank takes over accounts that have been dormant for 10 years. Mahendran pointed out that no changes had been made to that process.

He added that Finance Minister Ravi Karunanayake had only stated that the money in the dormant accounts would be taken over by the Treasury. “But it will be given back to the rightful account holder,” Mahendran added.

Accordingly, the Central Bank can issue instructions to banks to transfer 90 percent of the amount in accounts that have been dormant for 10 years, while the remainder would be with the respective bank in the event the original account holder wishes to withdraw the amount.

“The money would be handed over to the original account holder once he requests for his money. The bank would decide on the interest to be given to the account holder following discussion with the Central Bank” he said.

Samarasiri pointed out that this process was done according to the Banking Act where the Central Bank was empowered to issue such instructions to banks on dormant accounts.

In addition, he also pointed out that there was a separate clause in the Act which stated that the Finance Minister had the authority to decide on what to do with the funds in dormant accounts.

The budget proposals for 2016 presented in November stated that all funds lying in dormant bank accounts would be transferred to the Consolidated Fund by January 1, 2016.

Accordingly, the money would be held in the consolidated fund as long as the accounts are inactive and would be released by the Central Bank when the customer wishes to reactivate his or her account.